[3] The notes and coins are not underwritten by the UK government or the Bank of England, and there is no guarantee of convertibility beyond that given by the Manx authorities.

[4] However, the requirement in the island's Currency Act 1992[1] for the Isle of Man Treasury to exchange Manx Pound banknotes on demand for Bank of England notes in practice restricts the issue of unbacked currency, and the aggregate total of notes issued must be pre-approved by Tynwald.

The first Manx coinage was issued privately in 1668[6] by John Murrey, a Douglas merchant, consisting of pennies equal in value to their English counterparts.

In 1696, a further devaluation occurred, with all English silver and gold coins valued at 14 Manx pence for every shilling.

In 1708, the Isle of Man Government approached the Royal Mint and requested that coinage be issued for the island.

In an attempt to resolve this problem, a proposal was introduced to abandon the separate Manx coinage in favour of British coins.

All coins issued before 1839 were declared by this law to be no longer current, and were recalled by the Board of Customs and exchanged by the Royal Mint at their original nominal value for the new coinage.

After 1839, no further Manx coins were issued, and they gradually became scarce and were replaced in general circulation on the island by the coinage of the United Kingdom.

The Isle of Man Government, having issued its own banknotes for ten years, took the opportunity to approach the Royal Mint and request its own versions of the decimal coins, which were introduced in 1971.

The "Murrey Pennies" of 1668 were the first to depict the 'triskeles' symbol and the Island motto "Quocunque Gesseris Stabit" (sic), both of which have continued to feature on Manx coinage until the present day (the motto was corrected to "Quocunque Jeceris Stabit" in the early 18th century).

In 1839, following the revaluation to 12 pence per shilling, the Royal Mint issued copper farthings, halfpennies and pennies which were similar to the previous designs but updated with the head of Queen Victoria.

In 1978 a 1 pound coin 22mm in diameter, 1.45mm thick and weighing 4g was introduced,[8] but was not popular compared to the existing £1 note which remained in use.

The front of all Manx banknotes has a pledge to honour the banknotes (the "promise to pay the bearer on demand") in the name of the Isle of Man Government, and features images of the previous Lord of Mann, Queen Elizabeth II (not wearing a crown), and the triskelion (three legs emblem) and motto.

[14][15] "The idea that the Isle of Man could manage its own currency, for example, with all the difficulties and pitfalls this would involve, is not a viable option.

"Tynwald passed the Currency Act 1992[1] as part of preparations in the event that the UK decided to adopt the euro.

In such a scenario, the Isle of Man wished to retain the right to issue its own currency, believing it to be an important public statement of independence.

Retaining the island's own coinage also enables the Isle of Man Treasury to continue to benefit from the accrual of interest on the issued money (seigniorage).

If, after converting to the euro, the exchange rates set by the European Central Bank were to cause economic harm to the Isle of Man, then there would be no eligibility for compulsory funding under Protocol 3 of the Maastricht Treaty, as there would have been for the UK.

On the positive side, the introduction of a Manx euro was expected to benefit Isle of Man manufacturers and tourism by the removal of currency exchange costs for customers and tourists from the eurozone.